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HF 17

2nd Engrossment - 93rd Legislature (2023 - 2024) Posted on 02/06/2023 03:52pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 2nd Engrossment

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A bill for an act
relating to health; prohibiting excessive price increases by manufacturers to generic
or off-patent drugs; authorizing the attorney general to take action against
manufacturers for certain price increases; prohibiting withdrawal of certain generic
or off-patent drugs sales; establishing a prescription drug affordability board and
prescription drug affordability advisory council; providing for prescription drug
cost reviews and remedies; providing appointments; imposing civil penalties;
requiring a report; appropriating money; amending Minnesota Statutes 2022,
section 151.071, subdivisions 1, 2; proposing coding for new law in Minnesota
Statutes, chapter 62J.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [62J.841] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 62J.841 to 62J.845, the following
definitions apply.
new text end

new text begin Subd. 2. new text end

new text begin Consumer Price Index. new text end

new text begin "Consumer Price Index" means the Consumer Price
Index, Annual Average, for All Urban Consumers, CPI-U: U.S. City Average, All Items,
reported by the United States Department of Labor, Bureau of Labor Statistics, or its
successor or, if the index is discontinued, an equivalent index reported by a federal authority
or, if no such index is reported, "Consumer Price Index" means a comparable index chosen
by the Bureau of Labor Statistics.
new text end

new text begin Subd. 3. new text end

new text begin Generic or off-patent drug. new text end

new text begin "Generic or off-patent drug" means any prescription
drug for which any exclusive marketing rights granted under the Federal Food, Drug, and
Cosmetic Act, section 351 of the federal Public Health Service Act, and federal patent law
have expired, including any drug-device combination product for the delivery of a generic
drug.
new text end

new text begin Subd. 4. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" has the meaning provided in section 151.01,
subdivision 14a.
new text end

new text begin Subd. 5. new text end

new text begin Prescription drug. new text end

new text begin "Prescription drug" means a drug for human use subject
to United States Code, title 21, section 353(b)(1).
new text end

new text begin Subd. 6. new text end

new text begin Wholesale acquisition cost. new text end

new text begin "Wholesale acquisition cost" has the meaning
provided in United States Code, title 42, section 1395w-3a.
new text end

new text begin Subd. 7. new text end

new text begin Wholesale distributor. new text end

new text begin "Wholesale distributor" has the meaning provided in
section 151.441, subdivision 14.
new text end

Sec. 2.

new text begin [62J.842] EXCESSIVE PRICE INCREASES PROHIBITED.
new text end

new text begin Subdivision 1. new text end

new text begin Prohibition. new text end

new text begin No manufacturer shall impose, or cause to be imposed, an
excessive price increase, whether directly or through a wholesale distributor, pharmacy, or
similar intermediary, on the sale of any generic or off-patent drug sold, dispensed, or
delivered to any consumer in the state.
new text end

new text begin Subd. 2. new text end

new text begin Excessive price increase. new text end

new text begin A price increase is excessive for purposes of this
section when:
new text end

new text begin (1) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds:
new text end

new text begin (i) 15 percent of the wholesale acquisition cost over the immediately preceding calendar
year; or
new text end

new text begin (ii) 40 percent of the wholesale acquisition cost over the immediately preceding three
calendar years; and
new text end

new text begin (2) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds
$30 for:
new text end

new text begin (i) a 30-day supply of the drug; or
new text end

new text begin (ii) a course of treatment lasting less than 30 days.
new text end

new text begin Subd. 3. new text end

new text begin Exemption. new text end

new text begin It is not a violation of this section for a wholesale distributor or
pharmacy to increase the price of a generic or off-patent drug if the price increase is directly
attributable to additional costs for the drug imposed on the wholesale distributor or pharmacy
by the manufacturer of the drug.
new text end

Sec. 3.

new text begin [62J.843] REGISTERED AGENT AND OFFICE WITHIN THE STATE.
new text end

new text begin Any manufacturer that sells, distributes, delivers, or offers for sale any generic or
off-patent drug in the state must maintain a registered agent and office within the state.
new text end

Sec. 4.

new text begin [62J.844] ENFORCEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Notification. new text end

new text begin The commissioner of management and budget and any
other state agency that provides or purchases a pharmacy benefit except the Department of
Human Services, and any entity under contract with a state agency to provide a pharmacy
benefit other than an entity under contract with the Department of Human Services, shall
notify the manufacturer of a generic or off-patent drug, the attorney general, and the Board
of Pharmacy of any price increase that the commissioner or entity believes may violate
section 62J.842.
new text end

new text begin Subd. 2. new text end

new text begin Submission of drug cost statement and other information by manufacturer;
investigation by attorney general.
new text end

new text begin (a) Within 45 days of receiving a notice under subdivision
1, the manufacturer of the generic or off-patent drug shall submit a drug cost statement to
the attorney general. The statement must:
new text end

new text begin (1) itemize the cost components related to production of the drug;
new text end

new text begin (2) identify the circumstances and timing of any increase in materials or manufacturing
costs that caused any increase during the preceding calendar year, or preceding three calendar
years as applicable, in the price of the drug; and
new text end

new text begin (3) provide any other information that the manufacturer believes to be relevant to a
determination of whether a violation of section 62J.842 has occurred.
new text end

new text begin (b) The attorney general may investigate whether a violation of section 62J.842 has
occurred, in accordance with section 8.31, subdivision 2.
new text end

new text begin Subd. 3. new text end

new text begin Petition to court. new text end

new text begin (a) On petition of the attorney general, a court may issue an
order:
new text end

new text begin (1) compelling the manufacturer of a generic or off-patent drug to:
new text end

new text begin (i) provide the drug cost statement required under subdivision 2, paragraph (a); and
new text end

new text begin (ii) answer interrogatories, produce records or documents, or be examined under oath,
as required by the attorney general under subdivision 2, paragraph (b);
new text end

new text begin (2) restraining or enjoining a violation of sections 62J.841 to 62J.845, including issuing
an order requiring that drug prices be restored to levels that comply with section 62J.842;
new text end

new text begin (3) requiring the manufacturer to provide an accounting to the attorney general of all
revenues resulting from a violation of section 62J.842;
new text end

new text begin (4) requiring the manufacturer to repay to all Minnesota consumers, including any
third-party payers, any money acquired as a result of a price increase that violates section
62J.842;
new text end

new text begin (5) notwithstanding section 16A.151, requiring that all revenues generated from a
violation of section 62J.842 be remitted to the state and deposited into a special fund, to be
used for initiatives to reduce the cost to consumers of acquiring prescription drugs, if a
manufacturer is unable to determine the individual transactions necessary to provide the
repayments described in clause (4);
new text end

new text begin (6) imposing a civil penalty of up to $10,000 per day for each violation of section 62J.842;
new text end

new text begin (7) providing for the attorney general's recovery of costs and disbursements incurred in
bringing an action against a manufacturer found in violation of section 62J.842, including
the costs of investigation and reasonable attorney's fees; and
new text end

new text begin (8) providing any other appropriate relief, including any other equitable relief as
determined by the court.
new text end

new text begin (b) For purposes of paragraph (a), clause (6), every individual transaction in violation
of section 62J.842 is considered a separate violation.
new text end

new text begin Subd. 4. new text end

new text begin Private right of action. new text end

new text begin Any action brought pursuant to section 8.31, subdivision
3a, by a person injured by a violation of section 62J.842 is for the benefit of the public.
new text end

Sec. 5.

new text begin [62J.845] PROHIBITION ON WITHDRAWAL OF GENERIC OR
OFF-PATENT DRUGS FOR SALE.
new text end

new text begin Subdivision 1. new text end

new text begin Prohibition. new text end

new text begin A manufacturer of a generic or off-patent drug is prohibited
from withdrawing that drug from sale or distribution within this state for the purpose of
avoiding the prohibition on excessive price increases under section 62J.842.
new text end

new text begin Subd. 2. new text end

new text begin Notice to board and attorney general. new text end

new text begin Any manufacturer that intends to
withdraw a generic or off-patent drug from sale or distribution within the state shall provide
a written notice of withdrawal to the Board of Pharmacy and the attorney general, at least
90 days prior to the withdrawal.
new text end

new text begin Subd. 3. new text end

new text begin Financial penalty. new text end

new text begin The attorney general shall assess a penalty of $500,000 on
any manufacturer of a generic or off-patent drug that the attorney general determines has
failed to comply with the requirements of this section.
new text end

Sec. 6.

new text begin [62J.846] SEVERABILITY.
new text end

new text begin If any provision of sections 62J.841 to 62J.845 or the application thereof to any person
or circumstance is held invalid for any reason in a court of competent jurisdiction, the
invalidity does not affect other provisions or any other application of sections 62J.841 to
62J.845 that can be given effect without the invalid provision or application.
new text end

Sec. 7.

new text begin [62J.85] CITATION.
new text end

new text begin Sections 62J.85 to 62J.95 may be cited as the "Prescription Drug Affordability Act."
new text end

Sec. 8.

new text begin [62J.86] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of sections 62J.85 to 62J.95, the following
terms have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Advisory council. new text end

new text begin "Advisory council" means the Prescription Drug Affordability
Advisory Council established under section 62J.88.
new text end

new text begin Subd. 3. new text end

new text begin Biologic. new text end

new text begin "Biologic" means a drug that is produced or distributed in accordance
with a biologics license application approved under Code of Federal Regulations, title 42,
section 447.502.
new text end

new text begin Subd. 4. new text end

new text begin Biosimilar. new text end

new text begin "Biosimilar" has the meaning provided in section 62J.84, subdivision
2, paragraph (b).
new text end

new text begin Subd. 5. new text end

new text begin Board. new text end

new text begin "Board" means the Prescription Drug Affordability Board established
under section 62J.87.
new text end

new text begin Subd. 6. new text end

new text begin Brand name drug. new text end

new text begin "Brand name drug" has the meaning provided in section
62J.84, subdivision 2, paragraph (c).
new text end

new text begin Subd. 7. new text end

new text begin Generic drug. new text end

new text begin "Generic drug" has the meaning provided in section 62J.84,
subdivision 2, paragraph (e).
new text end

new text begin Subd. 8. new text end

new text begin Group purchaser. new text end

new text begin "Group purchaser" has the meaning given in section 62J.03,
subdivision 6, and includes pharmacy benefit managers as defined in section 62W.02,
subdivision 15.
new text end

new text begin Subd. 9. new text end

new text begin Manufacturer. new text end

new text begin "Manufacturer" means an entity that:
new text end

new text begin (1) engages in the manufacture of a prescription drug product or enters into a lease with
another manufacturer to market and distribute a prescription drug product under the entity's
own name; and
new text end

new text begin (2) sets or changes the wholesale acquisition cost of the prescription drug product it
manufacturers or markets.
new text end

new text begin Subd. 10. new text end

new text begin Prescription drug product. new text end

new text begin "Prescription drug product" means a brand name
drug, a generic drug, a biologic, or a biosimilar.
new text end

new text begin Subd. 11. new text end

new text begin Wholesale acquisition cost or WAC. new text end

new text begin "Wholesale acquisition cost" or "WAC"
has the meaning given in United States Code, title 42, section 1395W-3a(c)(6)(B).
new text end

Sec. 9.

new text begin [62J.87] PRESCRIPTION DRUG AFFORDABILITY BOARD.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Legislative Coordinating Commission shall establish
the Prescription Drug Affordability Board, which shall be governed as a board under section
15.012, paragraph (a), to protect consumers, state and local governments, health plan
companies, providers, pharmacies, and other health care system stakeholders from
unaffordable costs of certain prescription drugs.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The Prescription Drug Affordability Board consists of nine
members appointed as follows:
new text end

new text begin (1) seven voting members appointed by the governor;
new text end

new text begin (2) one nonvoting member appointed by the majority leader of the senate; and
new text end

new text begin (3) one nonvoting member appointed by the speaker of the house.
new text end

new text begin (b) All members appointed must have knowledge and demonstrated expertise in
pharmaceutical economics and finance or health care economics and finance. A member
must not be an employee of, a board member of, or a consultant to a manufacturer or trade
association for manufacturers or a pharmacy benefit manager or trade association for
pharmacy benefit managers.
new text end

new text begin (c) Initial appointments must be made by January 1, 2024.
new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin (a) Board appointees shall serve four-year terms, except that initial
appointees shall serve staggered terms of two, three, or four years as determined by lot by
the secretary of state. A board member shall serve no more than two consecutive terms.
new text end

new text begin (b) A board member may resign at any time by giving written notice to the board.
new text end

new text begin Subd. 4. new text end

new text begin Chair; other officers. new text end

new text begin (a) The governor shall designate an acting chair from
the members appointed by the governor.
new text end

new text begin (b) The board shall elect a chair to replace the acting chair at the first meeting of the
board by a majority of the members. The chair shall serve for one year.
new text end

new text begin (c) The board shall elect a vice-chair and other officers from its membership as it deems
necessary.
new text end

new text begin Subd. 5. new text end

new text begin Staff; technical assistance. new text end

new text begin (a) The board shall hire an executive director and
other staff, who shall serve in the unclassified service. The executive director must have
knowledge and demonstrated expertise in pharmacoeconomics, pharmacology, health policy,
health services research, medicine, or a related field or discipline. The board may employ
or contract for professional and technical assistance as the board deems necessary to perform
the board's duties.
new text end

new text begin (b) The attorney general shall provide legal services to the board.
new text end

new text begin Subd. 6. new text end

new text begin Compensation. new text end

new text begin The board members shall not receive compensation but may
receive reimbursement for expenses as authorized under section 15.059, subdivision 3.
new text end

new text begin Subd. 7. new text end

new text begin Meetings. new text end

new text begin (a) Meetings of the board are subject to chapter 13D. The board shall
meet publicly at least every three months to review prescription drug product information
submitted to the board under section 62J.90. If there are no pending submissions, the chair
of the board may cancel or postpone the required meeting. The board may meet in closed
session when reviewing proprietary information as determined under the standards developed
in accordance with section 62J.91, subdivision 3.
new text end

new text begin (b) The board shall announce each public meeting at least three weeks prior to the
scheduled date of the meeting. Any materials for the meeting shall be made public at least
two weeks prior to the scheduled date of the meeting.
new text end

new text begin (c) At each public meeting, the board shall provide the opportunity for comments from
the public, including the opportunity for written comments to be submitted to the board
prior to a decision by the board.
new text end

Sec. 10.

new text begin [62J.88] PRESCRIPTION DRUG AFFORDABILITY ADVISORY
COUNCIL.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The governor shall appoint a 12-member stakeholder
advisory council to provide advice to the board on drug cost issues and to represent
stakeholders' views. The governor shall appoint the members of the advisory council based
on the members' knowledge and demonstrated expertise in one or more of the following
areas: the pharmaceutical business; practice of medicine; patient perspectives; health care
cost trends and drivers; clinical and health services research; and the health care marketplace.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin The council's membership shall consist of the following:
new text end

new text begin (1) two members representing patients and health care consumers;
new text end

new text begin (2) two members representing health care providers;
new text end

new text begin (3) one member representing health plan companies;
new text end

new text begin (4) two members representing employers, with one member representing large employers
and one member representing small employers;
new text end

new text begin (5) one member representing government employee benefit plans;
new text end

new text begin (6) one member representing pharmaceutical manufacturers;
new text end

new text begin (7) one member who is a health services clinical researcher;
new text end

new text begin (8) one member who is a pharmacologist; and
new text end

new text begin (9) one member representing the commissioner of health with expertise in health
economics.
new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin (a) The initial appointments to the advisory council must be made by
January 1, 2024. The initial appointed advisory council members shall serve staggered terms
of two, three, or four years determined by lot by the secretary of state. Following the initial
appointments, the advisory council members shall serve four-year terms.
new text end

new text begin (b) Removal and vacancies of advisory council members shall be governed by section
15.059.
new text end

new text begin Subd. 4. new text end

new text begin Compensation. new text end

new text begin Advisory council members may be compensated according to
section 15.059.
new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin Meetings of the advisory council are subject to chapter 13D. The
advisory council shall meet publicly at least every three months to advise the board on drug
cost issues related to the prescription drug product information submitted to the board under
section 62J.90.
new text end

new text begin Subd. 6. new text end

new text begin Exemption. new text end

new text begin Notwithstanding section 15.059, the advisory council shall not
expire.
new text end

Sec. 11.

new text begin [62J.89] CONFLICTS OF INTEREST.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "conflict of interest" means a
financial or personal association that has the potential to bias or have the appearance of
biasing a person's decisions in matters related to the board, the advisory council, or in the
conduct of the board's or council's activities. A conflict of interest includes any instance in
which a person, a person's immediate family member, including a spouse, parent, child, or
other legal dependent, or an in-law of any of the preceding individuals, has received or
could receive a direct or indirect financial benefit of any amount deriving from the result
or findings of a decision or determination of the board. For purposes of this section, a
financial benefit includes honoraria, fees, stock, the value of the member's, immediate family
member's, or in-law's stock holdings, and any direct financial benefit deriving from the
finding of a review conducted under sections 62J.85 to 62J.95. Ownership of securities is
not a conflict of interest if the securities are: (1) part of a diversified mutual or exchange
traded fund; or (2) in a tax-deferred or tax-exempt retirement account that is administered
by an independent trustee.
new text end

new text begin Subd. 2. new text end

new text begin General. new text end

new text begin (a) Prior to the acceptance of an appointment or employment, or prior
to entering into a contractual agreement, a board or advisory council member, board staff
member, or third-party contractor must disclose to the appointing authority or the board
any conflicts of interest. The information disclosed must include the type, nature, and
magnitude of the interests involved.
new text end

new text begin (b) A board member, board staff member, or third-party contractor with a conflict of
interest with regard to any prescription drug product under review must recuse themselves
from any discussion, review, decision, or determination made by the board relating to the
prescription drug product.
new text end

new text begin (c) Any conflict of interest must be disclosed in advance of the first meeting after the
conflict is identified or within five days after the conflict is identified, whichever is earlier.
new text end

new text begin Subd. 3. new text end

new text begin Prohibitions. new text end

new text begin Board members, board staff, or third-party contractors are
prohibited from accepting gifts, bequeaths, or donations of services or property that raise
the specter of a conflict of interest or have the appearance of injecting bias into the activities
of the board.
new text end

Sec. 12.

new text begin [62J.90] PRESCRIPTION DRUG PRICE INFORMATION; DECISION
TO CONDUCT COST REVIEW.
new text end

new text begin Subdivision 1. new text end

new text begin Drug price information from the commissioner of health and other
sources.
new text end

new text begin (a) The commissioner of health shall provide to the board the information reported
to the commissioner by drug manufacturers under section 62J.84, subdivisions 3, 4, and 5.
The commissioner shall provide this information to the board within 30 days of the date the
information is received from drug manufacturers.
new text end

new text begin (b) The board shall subscribe to one or more prescription drug pricing files, such as
Medispan or FirstDatabank, or as otherwise determined by the board.
new text end

new text begin Subd. 2. new text end

new text begin Identification of certain prescription drug products. new text end

new text begin (a) The board, in
consultation with the advisory council, shall identify selected prescription drug products
based on the following criteria:
new text end

new text begin (1) brand name drugs or biologics for which the WAC increases by $3,000 during any
12-month period or course of treatment if less than 12 months, after adjusting for changes
in the consumer price index (CPI);
new text end

new text begin (2) brand name drugs or biologics with a WAC of $60,000 or more per calendar year
or per course of treatment;
new text end

new text begin (3) biosimilar drugs that have a WAC that is not at least 20 percent lower than the
referenced brand name biologic at the time the biosimilar is introduced; and
new text end

new text begin (4) generic drugs for which the WAC:
new text end

new text begin (i) is $100 or more, after adjusting for changes in the CPI, for:
new text end

new text begin (A) a 30-day supply lasting a patient for 30 consecutive days based on the recommended
dosage approved for labeling by the United States Food and Drug Administration (FDA);
new text end

new text begin (B) a supply lasting a patient for fewer than 30 days based on recommended dosage
approved for labeling by the FDA; or
new text end

new text begin (C) one unit of the drug if the labeling approved by the FDA does not recommend a
finite dosage; and
new text end

new text begin (ii) is increased by 200 percent or more during the immediate preceding 12-month period,
as determined by the difference between the resulting WAC and the average of the WAC
reported over the preceding 12 months, after adjusting for changes in the CPI.
new text end

new text begin (b) The board, in consultation with the advisory council, may identify prescription drug
products not described in paragraph (a) that may impose costs that create significant
affordability challenges for the state health care system or for patients, including but not
limited to drugs to address public health emergencies.
new text end

new text begin (c) The board shall make available to the public the names and related price information
of the prescription drug products identified under this subdivision, with the exception of
information determined by the board to be proprietary under the standards developed by
the board under section 62J.91, subdivision 3, and information provided by the commissioner
of health classified as not public data under section 13.02, subdivision 8a.
new text end

new text begin Subd. 3. new text end

new text begin Determination to proceed with review. new text end

new text begin (a) The board may initiate a cost
review of a prescription drug product identified by the board under this section.
new text end

new text begin (b) The board shall consider requests by the public for the board to proceed with a cost
review of any prescription drug product identified under this section.
new text end

new text begin (c) If there is no consensus among the members of the board on whether to initiate a
cost review of a prescription drug product, any member of the board may request a vote to
determine whether to review the cost of the prescription drug product.
new text end

Sec. 13.

new text begin [62J.91] PRESCRIPTION DRUG PRODUCT REVIEWS.
new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin Once a decision by the board has been made to proceed with
a cost review of a prescription drug product, the board shall conduct the review and make
a determination as to whether appropriate utilization of the prescription drug under review,
based on utilization that is consistent with the United States Food and Drug Administration
(FDA) label or standard medical practice, has led or will lead to affordability challenges
for the state health care system or for patients.
new text end

new text begin Subd. 2. new text end

new text begin Review considerations. new text end

new text begin In reviewing the cost of a prescription drug product,
the board may consider the following factors:
new text end

new text begin (1) the price at which the prescription drug product has been and will be sold in the state;
new text end

new text begin (2) manufacturer monetary price concessions, discounts, or rebates, and drug-specific
patient assistance;
new text end

new text begin (3) the price of therapeutic alternatives;
new text end

new text begin (4) the cost to group purchasers based on patient access consistent with the FDA-labeled
indications and standard medical practice;
new text end

new text begin (5) measures of patient access, including cost-sharing and other metrics;
new text end

new text begin (6) the extent to which the attorney general or a court has determined that a price increase
for a generic or off-patent prescription drug product was excessive under sections 62J.842
and 62J.844;
new text end

new text begin (7) any information a manufacturer chooses to provide; and
new text end

new text begin (8) any other factors as determined by the board.
new text end

new text begin Subd. 3. new text end

new text begin Public data; proprietary information. new text end

new text begin (a) Any submission made to the board
related to a drug cost review must be made available to the public with the exception of
information determined by the board to be proprietary and information provided by the
commissioner of health classified as not public data under section 13.02, subdivision 8a.
new text end

new text begin (b) The board shall establish the standards for the information to be considered proprietary
under paragraph (a) and section 62J.90, subdivision 2, including standards for heightened
consideration of proprietary information for submissions for a cost review of a drug that is
not yet approved by the FDA.
new text end

new text begin (c) Prior to the board establishing the standards under paragraph (b), the public shall be
provided notice and the opportunity to submit comments.
new text end

new text begin (d) The establishment of standards under this subdivision is exempt from the rulemaking
requirements under chapter 14, and section 14.386 does not apply.
new text end

Sec. 14.

new text begin [62J.92] DETERMINATIONS; COMPLIANCE; REMEDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Upper payment limit. new text end

new text begin (a) In the event the board finds that the spending
on a prescription drug product reviewed under section 62J.91 creates an affordability
challenge for the state health care system or for patients, the board shall establish an upper
payment limit after considering:
new text end

new text begin (1) extraordinary supply costs, if applicable;
new text end

new text begin (2) the range of prices at which the drug is sold in the United States according to one or
more pricing files accessed under section 62J.90, subdivision 1, and the range at which
pharmacies are reimbursed in Canada; and
new text end

new text begin (3) any other relevant pricing and administrative cost information for the drug.
new text end

new text begin (b) The upper payment limit must apply to all state-regulated entity purchases, payments,
billing, and payer reimbursements for the prescription drug product that is intended for
individuals in the state in person, by mail, or by other means.
new text end

new text begin Subd. 2. new text end

new text begin Implementation and administration of the upper payment limit. new text end

new text begin (a) An
upper payment limit may take effect no sooner than 120 days following the date of its public
release by the board.
new text end

new text begin (b) When setting an upper payment limit for a drug subject to the Medicare maximum
fair price under United States Code, title 42, section 1191(c), the board shall set the upper
payment limit at the Medicare maximum fair price.
new text end

new text begin (c) Pharmacy dispensing fees must not be counted toward or subject to any upper payment
limit. State-licensed independent pharmacies must not be reimbursed by health carriers and
pharmacy benefit managers at amounts that are less than the upper payment limit.
new text end

new text begin (d) Health plan companies and pharmacy benefit managers shall report annually to the
board, in the form and manner specified by the board, on how cost savings resulting from
the establishment of an upper payment limit have been used by the health plan company or
pharmacy benefit manager to benefit enrollees, including but not limited to reducing enrollee
cost-sharing.
new text end

new text begin Subd. 3. new text end

new text begin Noncompliance. new text end

new text begin (a) The board shall, and other persons may, notify the Office
of the Attorney General of a potential failure by an entity subject to an upper payment limit
to comply with that limit.
new text end

new text begin (b) If the Office of the Attorney General finds that an entity was noncompliant with the
upper payment limit requirements, the attorney general may pursue remedies consistent
with chapter 8 or appropriate criminal charges if there is evidence of intentional profiteering.
new text end

new text begin (c) An entity who obtains price concessions from a drug manufacturer that result in a
lower net cost to the stakeholder than the upper payment limit established by the board is
not considered noncompliant.
new text end

new text begin (d) The Office of the Attorney General may provide guidance to stakeholders concerning
activities that could be considered noncompliant.
new text end

new text begin Subd. 4. new text end

new text begin Appeals. new text end

new text begin (a) Persons affected by a decision of the board may request an appeal
of the board's decision within 30 days of the date of the decision. The board shall hear the
appeal and render a decision within 60 days of the hearing.
new text end

new text begin (b) All appeal decisions are subject to judicial review in accordance with chapter 14.
new text end

Sec. 15.

new text begin [62J.93] REPORTS.
new text end

new text begin Beginning March 1, 2024, and each March 1 thereafter, the board shall submit a report
to the governor and legislature on general price trends for prescription drug products and
the number of prescription drug products that were subject to the board's cost review and
analysis, including the result of any analysis as well as the number and disposition of appeals
and judicial reviews.
new text end

Sec. 16.

new text begin [62J.94] ERISA PLANS AND MEDICARE DRUG PLANS.
new text end

new text begin (a) Nothing in sections 62J.85 to 62J.95 shall be construed to require ERISA plans or
Medicare Part D plans to comply with decisions of the board. ERISA plans or Medicare
Part D plans are free to choose to exceed the upper payment limit established by the board
under section 62J.92.
new text end

new text begin (b) Providers who dispense and administer drugs in the state must bill all payers no more
than the upper payment limit without regard to whether an ERISA plan or Medicare Part
D plan chooses to reimburse the provider in an amount greater than the upper payment limit
established by the board.
new text end

new text begin (c) For purposes of this section, an ERISA plan or group health plan is an employee
welfare benefit plan established by or maintained by an employer or an employee
organization, or both, that provides employer sponsored health coverage to employees and
the employee's dependents and is subject to the Employee Retirement Income Security Act
of 1974 (ERISA).
new text end

Sec. 17.

new text begin [62J.95] SEVERABILITY.
new text end

new text begin If any provision of sections 62J.85 to 62J.94 or the application thereof to any person or
circumstance is held invalid for any reason in a court of competent jurisdiction, the invalidity
does not affect other provisions or any other application of sections 62J.85 to 62J.94 that
can be given effect without the invalid provision or application.
new text end

Sec. 18.

Minnesota Statutes 2022, section 151.071, subdivision 1, is amended to read:


Subdivision 1.

Forms of disciplinary action.

When the board finds that a licensee,
registrant, or applicant has engaged in conduct prohibited under subdivision 2, it may do
one or more of the following:

(1) deny the issuance of a license or registration;

(2) refuse to renew a license or registration;

(3) revoke the license or registration;

(4) suspend the license or registration;

(5) impose limitations, conditions, or both on the license or registration, including but
not limited to: the limitation of practice to designated settings; the limitation of the scope
of practice within designated settings; the imposition of retraining or rehabilitation
requirements; the requirement of practice under supervision; the requirement of participation
in a diversion program such as that established pursuant to section 214.31 or the conditioning
of continued practice on demonstration of knowledge or skills by appropriate examination
or other review of skill and competence;

(6) impose a civil penalty not exceeding $10,000 for each separate violation,new text begin except that
a civil penalty not exceeding $25,000 may be imposed for each separate violation of section
62J.842,
new text end the amount of the civil penalty to be fixed so as to deprive a licensee or registrant
of any economic advantage gained by reason of the violation, to discourage similar violations
by the licensee or registrant or any other licensee or registrant, or to reimburse the board
for the cost of the investigation and proceeding, including but not limited to, fees paid for
services provided by the Office of Administrative Hearings, legal and investigative services
provided by the Office of the Attorney General, court reporters, witnesses, reproduction of
records, board members' per diem compensation, board staff time, and travel costs and
expenses incurred by board staff and board members; and

(7) reprimand the licensee or registrant.

Sec. 19.

Minnesota Statutes 2022, section 151.071, subdivision 2, is amended to read:


Subd. 2.

Grounds for disciplinary action.

The following conduct is prohibited and is
grounds for disciplinary action:

(1) failure to demonstrate the qualifications or satisfy the requirements for a license or
registration contained in this chapter or the rules of the board. The burden of proof is on
the applicant to demonstrate such qualifications or satisfaction of such requirements;

(2) obtaining a license by fraud or by misleading the board in any way during the
application process or obtaining a license by cheating, or attempting to subvert the licensing
examination process. Conduct that subverts or attempts to subvert the licensing examination
process includes, but is not limited to: (i) conduct that violates the security of the examination
materials, such as removing examination materials from the examination room or having
unauthorized possession of any portion of a future, current, or previously administered
licensing examination; (ii) conduct that violates the standard of test administration, such as
communicating with another examinee during administration of the examination, copying
another examinee's answers, permitting another examinee to copy one's answers, or
possessing unauthorized materials; or (iii) impersonating an examinee or permitting an
impersonator to take the examination on one's own behalf;

(3) for a pharmacist, pharmacy technician, pharmacist intern, applicant for a pharmacist
or pharmacy license, or applicant for a pharmacy technician or pharmacist intern registration,
conviction of a felony reasonably related to the practice of pharmacy. Conviction as used
in this subdivision includes a conviction of an offense that if committed in this state would
be deemed a felony without regard to its designation elsewhere, or a criminal proceeding
where a finding or verdict of guilt is made or returned but the adjudication of guilt is either
withheld or not entered thereon. The board may delay the issuance of a new license or
registration if the applicant has been charged with a felony until the matter has been
adjudicated;

(4) for a facility, other than a pharmacy, licensed or registered by the board, if an owner
or applicant is convicted of a felony reasonably related to the operation of the facility. The
board may delay the issuance of a new license or registration if the owner or applicant has
been charged with a felony until the matter has been adjudicated;

(5) for a controlled substance researcher, conviction of a felony reasonably related to
controlled substances or to the practice of the researcher's profession. The board may delay
the issuance of a registration if the applicant has been charged with a felony until the matter
has been adjudicated;

(6) disciplinary action taken by another state or by one of this state's health licensing
agencies:

(i) revocation, suspension, restriction, limitation, or other disciplinary action against a
license or registration in another state or jurisdiction, failure to report to the board that
charges or allegations regarding the person's license or registration have been brought in
another state or jurisdiction, or having been refused a license or registration by any other
state or jurisdiction. The board may delay the issuance of a new license or registration if an
investigation or disciplinary action is pending in another state or jurisdiction until the
investigation or action has been dismissed or otherwise resolved; and

(ii) revocation, suspension, restriction, limitation, or other disciplinary action against a
license or registration issued by another of this state's health licensing agencies, failure to
report to the board that charges regarding the person's license or registration have been
brought by another of this state's health licensing agencies, or having been refused a license
or registration by another of this state's health licensing agencies. The board may delay the
issuance of a new license or registration if a disciplinary action is pending before another
of this state's health licensing agencies until the action has been dismissed or otherwise
resolved;

(7) for a pharmacist, pharmacy, pharmacy technician, or pharmacist intern, violation of
any order of the board, of any of the provisions of this chapter or any rules of the board or
violation of any federal, state, or local law or rule reasonably pertaining to the practice of
pharmacy;

(8) for a facility, other than a pharmacy, licensed by the board, violations of any order
of the board, of any of the provisions of this chapter or the rules of the board or violation
of any federal, state, or local law relating to the operation of the facility;

(9) engaging in any unethical conduct; conduct likely to deceive, defraud, or harm the
public, or demonstrating a willful or careless disregard for the health, welfare, or safety of
a patient; or pharmacy practice that is professionally incompetent, in that it may create
unnecessary danger to any patient's life, health, or safety, in any of which cases, proof of
actual injury need not be established;

(10) aiding or abetting an unlicensed person in the practice of pharmacy, except that it
is not a violation of this clause for a pharmacist to supervise a properly registered pharmacy
technician or pharmacist intern if that person is performing duties allowed by this chapter
or the rules of the board;

(11) for an individual licensed or registered by the board, adjudication as mentally ill
or developmentally disabled, or as a chemically dependent person, a person dangerous to
the public, a sexually dangerous person, or a person who has a sexual psychopathic
personality, by a court of competent jurisdiction, within or without this state. Such
adjudication shall automatically suspend a license for the duration thereof unless the board
orders otherwise;

(12) for a pharmacist or pharmacy intern, engaging in unprofessional conduct as specified
in the board's rules. In the case of a pharmacy technician, engaging in conduct specified in
board rules that would be unprofessional if it were engaged in by a pharmacist or pharmacist
intern or performing duties specifically reserved for pharmacists under this chapter or the
rules of the board;

(13) for a pharmacy, operation of the pharmacy without a pharmacist present and on
duty except as allowed by a variance approved by the board;

(14) for a pharmacist, the inability to practice pharmacy with reasonable skill and safety
to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type
of material or as a result of any mental or physical condition, including deterioration through
the aging process or loss of motor skills. In the case of registered pharmacy technicians,
pharmacist interns, or controlled substance researchers, the inability to carry out duties
allowed under this chapter or the rules of the board with reasonable skill and safety to
patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type
of material or as a result of any mental or physical condition, including deterioration through
the aging process or loss of motor skills;

(15) for a pharmacist, pharmacy, pharmacist intern, pharmacy technician, medical gas
dispenser, or controlled substance researcher, revealing a privileged communication from
or relating to a patient except when otherwise required or permitted by law;

(16) for a pharmacist or pharmacy, improper management of patient records, including
failure to maintain adequate patient records, to comply with a patient's request made pursuant
to sections 144.291 to 144.298, or to furnish a patient record or report required by law;

(17) fee splitting, including without limitation:

(i) paying, offering to pay, receiving, or agreeing to receive, a commission, rebate,
kickback, or other form of remuneration, directly or indirectly, for the referral of patients;

(ii) referring a patient to any health care provider as defined in sections 144.291 to
144.298 in which the licensee or registrant has a financial or economic interest as defined
in section 144.6521, subdivision 3, unless the licensee or registrant has disclosed the
licensee's or registrant's financial or economic interest in accordance with section 144.6521;
and

(iii) any arrangement through which a pharmacy, in which the prescribing practitioner
does not have a significant ownership interest, fills a prescription drug order and the
prescribing practitioner is involved in any manner, directly or indirectly, in setting the price
for the filled prescription that is charged to the patient, the patient's insurer or pharmacy
benefit manager, or other person paying for the prescription or, in the case of veterinary
patients, the price for the filled prescription that is charged to the client or other person
paying for the prescription, except that a veterinarian and a pharmacy may enter into such
an arrangement provided that the client or other person paying for the prescription is notified,
in writing and with each prescription dispensed, about the arrangement, unless such
arrangement involves pharmacy services provided for livestock, poultry, and agricultural
production systems, in which case client notification would not be required;

(18) engaging in abusive or fraudulent billing practices, including violations of the
federal Medicare and Medicaid laws or state medical assistance laws or rules;

(19) engaging in conduct with a patient that is sexual or may reasonably be interpreted
by the patient as sexual, or in any verbal behavior that is seductive or sexually demeaning
to a patient;

(20) failure to make reports as required by section 151.072 or to cooperate with an
investigation of the board as required by section 151.074;

(21) knowingly providing false or misleading information that is directly related to the
care of a patient unless done for an accepted therapeutic purpose such as the dispensing and
administration of a placebo;

(22) aiding suicide or aiding attempted suicide in violation of section 609.215 as
established by any of the following:

(i) a copy of the record of criminal conviction or plea of guilty for a felony in violation
of section 609.215, subdivision 1 or 2;

(ii) a copy of the record of a judgment of contempt of court for violating an injunction
issued under section 609.215, subdivision 4;

(iii) a copy of the record of a judgment assessing damages under section 609.215,
subdivision 5; or

(iv) a finding by the board that the person violated section 609.215, subdivision 1 or 2.
The board must investigate any complaint of a violation of section 609.215, subdivision 1
or 2;

(23) for a pharmacist, practice of pharmacy under a lapsed or nonrenewed license. For
a pharmacist intern, pharmacy technician, or controlled substance researcher, performing
duties permitted to such individuals by this chapter or the rules of the board under a lapsed
or nonrenewed registration. For a facility required to be licensed under this chapter, operation
of the facility under a lapsed or nonrenewed license or registration; deleted text beginand
deleted text end

(24) for a pharmacist, pharmacist intern, or pharmacy technician, termination or discharge
from the health professionals services program for reasons other than the satisfactory
completion of the programdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (25) for a manufacturer, a violation of section 62J.842 or section 62J.845.
new text end

Sec. 20. new text beginAPPROPRIATION.
new text end

new text begin $....... in fiscal year 2024 and $....... in fiscal year 2025 are appropriated from the general
fund to the Prescription Drug Affordability Board established under Minnesota Statutes,
section 62J.87, for implementation of the Prescription Drug Affordability Act.
new text end